Accounting and Related Services Arbitration Rules and Mediation Procedures

Transcription

1 Accounting and Related Services Arbitration Rules and Mediation Procedures Rules Amended and Effective February 1, 2015 Available online at adr.org/accounting

2 Table of Contents Introduction Standard Arbitration Clause Mediation Accounting and Related Services Arbitration Rules A-1. Agreement of Parties A-2. AAA Administration of the Arbitration... 8 A-3. National Panel of Arbitrators... 8 A-4. The Term Arbitrator A-5. Mediation A-6. Regional Offices A-7. Filing Requirements A-8. Answers and Counterclaims A-9. Changes of Claim A-10. Jurisdiction A-11. Interpretation and Application of Rules A-12. Applicable Procedures A-13. Administrative Conference A-14. Fixing of Locale A-15. Number of Arbitrators A-16. Appointment from National Panel A-17. Direct Appointment by a Party A-18. Appointment of Chairperson by Party-Appointed Arbitrators or Parties A-19. Nationality of Arbitrator A-20. Disclosure A-21. Disqualification of Arbitrator A-22. Notice of Arbitration Appointment A-23. Communication with Arbitrator A-24. Vacancies A-25. Preliminary Hearing A-26. Disclosure and Production of Information A-27. Enforcement Powers of the Arbitrator A-28. Dispositive Motions A-29. Date, Time, and Place of Hearing A-30. Attendance at Hearings RULES AND MEDIATION PROCEDURES American Arbitration Association

3 A-31. Representation A-32. Stenographic Record A-33. Postponements A-34. Oaths A-35. Conduct of Proceedings A-36. Inspection or Investigation A-37. Majority Decision A-38. Arbitration in the Absence of a Party or Representative A-39. Post-Hearing Filing of Documents or Other Evidence A-40. Closing of Hearing A-41. Reopening of Hearing A-42. Time of Award A-43. Form of Award A-44. Scope of Award A-45. Award Upon Settlement Consent Award A-46. Delivery of Award to Parties A-47. Modification of Award A-48. Waiver of Rules A-49. Extensions of Time A-50. Serving of Notice and Communications A-51. Release of Documents for Judicial Proceedings A-52. Applications to Court and Exclusion of Liability A-53. Interim Measures A-54. Emergency Measures of Protection A-55. Administrative Fees A-56. Expenses A-57. Neutral Arbitrator s Compensation A-58. Deposits A-59. Remedies for Nonpayment A-60. Sanctions Expedited Procedures E-1. Limitation on Extensions E-2. Changes of Claim or Counterclaim E-3. Serving of Notices E-4. Appointment and Qualifications of Arbitrator Rules Amended and Effective February 1, ACCOUNTING RULES 3

4 E-5. Exchange of Exhibits E-6. Proceedings on Documents and Procedures for the Resolution of Disputes through Document Submission E-7. Date, Time, and Place of Hearing E-8. The Hearing E-9. Time of Award Preliminary Hearing P-1. Management of the Hearing P-2. Checklist Disclosure and Production of Information D-1. Management of Process D-2. Documents on which a Party Relies D-3. Preservation D-4. Documents in the Possession of Another Party D-5. Electronically Stored Information (ESI) D-6. Inspections D-7. Depositions D-8. Experts D-9. Interrogatories and Other Forms of Written Questions D-10. Privileges, Professional Ethics, and Professional Standards D-11. Costs and Compliance Administrative Fee Schedules (Standard and Flexible Fees) Commercial Mediation Procedures M-1. Agreement of Parties M-2. Initiation of Mediation M-3. Representation M-4. Appointment of the Mediator M-5. Mediator s Impartiality and Duty to Disclose M-6. Vacancies M-7. Duties and Responsibilities of the Mediator M-8. Responsibilities of the Parties M-9. Privacy RULES AND MEDIATION PROCEDURES American Arbitration Association

5 M-10. Confidentiality M-11. No Stenographic Record M-12. Termination of Mediation M-13. Exclusion of Liability M-14. Interpretation and Application of Procedures M-15. Deposits M-16. Expenses M-17. Cost of the Mediation Rules Amended and Effective February 1, ACCOUNTING RULES 5

6 Accounting and Related Services Arbitration Rules and Mediation Procedures Introduction Each year thousands of businesses enter into agreements with CPAs and accounting firms that provide accounting, auditing, tax, and consulting services ( Accounting and Related Services ). Occasionally disagreements develop over how these services are performed. Many of these disputes may be resolved by arbitration, the voluntary submission of a dispute to a disinterested person or persons for final and binding determination. Arbitration is an effective way to resolve these disputes privately, promptly, and economically. The American Arbitration Association ( AAA ) is a not-for-profit, public service organization offering a broad range of dispute resolution services to business executives, attorneys, individuals, trade associations, unions, management, consumers, families, communities, and all levels of government. Services are available through AAA headquarters in New York City and through offices located in major cities throughout the United States. Hearings may be held at locations convenient for the parties and are not limited to cities with AAA offices. In addition, the AAA serves as a center for education and training, issues specialized publications, and conducts research on all forms of out-of-court dispute settlement. These rules have been designed in cooperation with the AAA s National Accounting Advisory Committee and will be applied whenever the parties shall have made these rules a part of their arbitration agreement. The parties can provide for mandatory arbitration of future disputes by inserting the following clause into their contracts or engagement letters ( contracts ). 6 RULES AND MEDIATION PROCEDURES American Arbitration Association

7 Standard Arbitration Clause Any controversy or claim arising out of or relating to this contract or the breach thereof shall be settled by arbitration administered by the American Arbitration Association under its Arbitration Rules for Accounting and Related Services and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Before including the above provision in their contracts and embarking on the arbitration process, firms should consult with their professional liability insurers to ensure that policy provisions permit the use of mandatory arbitration clauses to resolve disputes and with their counsel to ensure that mandatory arbitration clauses to resolve disputes comply with applicable state laws, rules, and regulations. Mediation If the parties want to adopt mediation as the first step in their contractual dispute settlement process, they can insert the following mediation clause into their contract in conjunction with or instead of a standard arbitration provision. If a dispute arises out of or relates to this contract or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure. If they have not already agreed to do so, the parties can also use a mediator before commencing arbitration by making the following submission. The parties hereby submit the following dispute to mediation administered by the American Arbitration Association under its Commercial Mediation Procedures (the clause may also provide for the qualifications of and the process for selection of the mediator(s), the method of payment, the locale of meetings, and any other item of concern to the parties). Rules Amended and Effective February 1, ACCOUNTING RULES 7

8 Accounting and Related Services Arbitration Rules A-1. Agreement of Parties The parties shall be deemed to have made these rules a part of their arbitration agreement whenever they have provided for arbitration by the AAA under its Accounting and Related Services Arbitration Rules. These rules and any amendment of them shall apply in the form in effect at the time the administrative requirements are met for a Demand for Arbitration or Submission Agreement received by the AAA. The parties, by written agreement, may vary the procedures set forth in these rules. Before the appointment of an arbitrator, any dispute over whether these rules or other AAA rules apply shall be decided by the AAA. After the appointment of the arbitrator, the arbitrator shall make such decision. A-2. AAA Administration of the Arbitration When parties agree to arbitrate under these rules, or when they provide for arbitration by the AAA and arbitration is initiated under these rules, they thereby authorize the AAA to administer the arbitration. The authority and duties of the AAA are prescribed in the agreement of the parties and in these rules and may be carried out through such of the AAA s representatives as it may direct. Arbitrations administered under these rules shall be administered only by the AAA or by an individual or organization authorized by the AAA to do so. A-3. National Panel of Arbitrators The AAA has established and will maintain a National Panel of Accounting and Related Services Arbitrators ( National Panel ) and shall appoint and remove arbitrators as provided in these rules. The AAA, in consultation with the National Accounting Advisory Committee, shall establish and maintain eligibility requirements for arbitrators to become and continue as members of the National Panel. An arbitrator may be appointed either from the National Panel of Arbitrators or another AAA Panel in accordance with A-16 or the parties may make a direct appointment of an arbitrator in accordance with A-17. A-4. The Term Arbitrator The term arbitrator in these rules refers to the arbitration panel, whether composed of one or more arbitrators and whether the arbitrators are neutral or non-neutral appointed directly by a party. 8 RULES AND MEDIATION PROCEDURES American Arbitration Association

9 A-5. Mediation Once the arbitration process has been initiated, in all cases where a claim or counterclaim exceeds $75,000 the parties shall mediate their dispute pursuant to the applicable provisions of the AAA s Commercial Mediation Procedures, or as otherwise agreed by the parties. Absent an agreement of the parties to the contrary, the mediation shall take place concurrently with the arbitration and shall not serve to delay the arbitration proceedings. However, any party to an arbitration may unilaterally opt out of such mediation upon notification to the AAA and the other parties to the arbitration. The parties shall confirm the completion of any mediation or any decision to opt out of such mediation to the AAA. Unless agreed to by all parties and the mediator, the mediator shall not be appointed as an arbitrator in the case. A-6. Regional Offices The AAA may, in its discretion, assign the administration of an arbitration to any of its regional offices. A-7. Filing Requirements (a) Arbitration under an arbitration provision in a contract shall be initiated by the initiating party ( claimant ) filing with the AAA a Demand for Arbitration, the administrative filing fee, and a copy of the applicable arbitration agreement from the parties contract that provides for arbitration. (b) Arbitration pursuant to a court order shall be initiated by the initiating party filing with the AAA a Demand for Arbitration, the administrative filing fee, and a copy of any applicable arbitration agreement from the parties contract that provides for arbitration. (i) The filing party shall include a copy of the court order. (ii) The filing fee must be paid before a matter is considered properly filed. If the court order directs that a specific party is responsible for the filing fee, it is the responsibility of the filing party either to make such payment to the AAA and seek reimbursement as directed in the court order or to make other such arrangements so that the filing fee is submitted to the AAA with the Demand. (iii) The party filing the Demand with the AAA is the claimant and the opposing party is the respondent regardless of which party initiated the court action. Parties may request that the arbitrator alter the order of proceedings if necessary pursuant to A-35. (c) It is the responsibility of the filing party to ensure that any conditions precedent to the filing of a case are met prior to filing for an arbitration, as well as any time requirements associated with the filing. Any dispute regarding whether a condition precedent has been met may be raised to the arbitrator for determination. Rules Amended and Effective February 1, ACCOUNTING RULES 9

10 (d) Parties to any existing dispute who have not previously agreed to use these rules may commence an arbitration under these rules by filing a written Submission Agreement and the administrative filing fee. To the extent that the parties Submission Agreement contains any variances from these rules, such variances should be clearly stated in the Submission Agreement. (e) Information to be included with any arbitration filing includes: (i) the name of each party; (ii) the address for each party, including telephone and facsimile (fax) numbers and electronic ( ) addresses; if applicable, the names, addresses, telephone and fax numbers, and addresses of any known representative for each party; (iii) a statement setting forth the nature of the claim, including the relief sought and the amount involved; and (iv) the locale requested if the arbitration agreement does not specify one. (f) The initiating party may file or submit a dispute to the AAA in the following manner: (i) through AAA WebFile, located at or (ii) by filing the complete Demand or Submission with any AAA office, regardless of the intended locale of hearing. (g) The filing party shall simultaneously provide a copy of the Demand and any supporting documents to the opposing party. (h) The AAA shall provide notice to the parties (or their representatives if so named) of the receipt of a Demand or Submission when the administrative filing requirements have been satisfied. The date on which the filing requirements are satisfied shall establish the date of filing the dispute for administration. However, all disputes in connection with the AAA s determination of the date of filing may be decided by the arbitrator. (i) If the filing does not satisfy the filing requirements set forth above, the AAA shall acknowledge to all named parties receipt of the incomplete filing and inform the parties of the filing deficiencies. If the deficiencies are not cured by the date specified by the AAA, the filing may be returned to the initiating party. A-8. Answers and Counterclaims (a) A respondent may file an answering statement with the AAA within 14 calendar days after notice of the filing of the Demand is sent by the AAA. The respondent shall, at the time of any such filing, send a copy of any answering statement to the claimant and to all other parties to the arbitration. If no answering statement is filed within the stated time, the respondent will be deemed to deny the claim. Failure to file an answering statement shall not operate to delay the arbitration. 10 RULES AND MEDIATION PROCEDURES American Arbitration Association

11 (b) A respondent may file a counterclaim at any time after notice of the filing of the Demand is sent by the AAA, subject to the limitations set forth in A-9. The respondent shall send a copy of the counterclaim to the claimant and all other parties to the arbitration. If a counterclaim is asserted, it shall include a statement setting forth the nature of the counterclaim including the relief sought and the amount involved. The filing fee as specified in the applicable AAA Fee Schedule must be paid at the time of the filing of any counterclaim. (c) If the respondent alleges that a different arbitration provision is controlling, the matter will be administered in accordance with the arbitration provision submitted by the initiating party subject to a final determination by the arbitrator. (d) If the counterclaim does not meet the requirements for filing a claim and the deficiency is not cured by the date specified by the AAA, it may be returned to the filing party. A-9. Changes of Claim (a) A party may at any time prior to the close of the hearing or by the date established by the arbitrator increase or decrease the amount of its claim or counterclaim. Written notice of the change of claim amount must be provided to the AAA and all parties. If the change of claim amount results in an increase in the administrative fee, the balance of the fee is due before the change of claim amount may be accepted by the arbitrator. (b) Any new or different claim or counterclaim, as opposed to an increase or decrease in the amount of a pending claim or counterclaim, shall be made in writing and filed with the AAA, and a copy shall be provided to the other party, who shall have a period of 14 calendar days from the date of such transmittal within which to file an answer to the proposed change of claim or counterclaim with the AAA. After the arbitrator is appointed, however, no new or different claim may be submitted except with the arbitrator s consent. A-10. Jurisdiction (a) The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim. (b) The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part. Such an arbitration clause shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitrator that the contract is null and void shall not for that reason alone render invalid the arbitration clause. (c) A party must object to the jurisdiction of the arbitrator or to the arbitrability of a claim or counterclaim no later than the filing of the answering statement to the claim or counterclaim that gives rise to the objection. The arbitrator may rule on such objections as a preliminary matter or as part of the final award. Rules Amended and Effective February 1, ACCOUNTING RULES 11

12 A-11. Interpretation and Application of Rules The arbitrator shall interpret and apply these rules insofar as they relate to the arbitrator s powers and duties. When there is more than one arbitrator and a difference arises among them concerning the meaning or application of these rules, it shall be decided by a majority vote. If that is not possible, either an arbitrator or a party may refer the question to the AAA for final decision. All other rules shall be interpreted and applied by the AAA. A-12. Applicable Procedures Unless the AAA in its discretion determines otherwise or the parties agree otherwise, the Expedited Procedures provided for herein shall be applied in any case where no disclosed claim or counterclaim exceeds $75,000, exclusive of interest and arbitration costs. Parties may also agree to use the Expedited Procedures in cases involving claims in excess of $75,000. The Expedited Procedures shall be applied as described in E-1 through E-9 of these rules, in addition to any other portion of these rules that is not in conflict with the Expedited Procedures. All other cases shall be administered in accordance with Sections A-1 through A-60 of these rules. A-13. Administrative Conference At the request of any party or upon the AAA s own initiative, the AAA may conduct an administrative conference, in person or by telephone, with the parties and/or their attorneys or other representatives. The conference may address such issues as arbitrator selection, mediation of the dispute, potential exchanges of information, a timetable for hearing, and any other administrative matters. A-14. Fixing of Locale The parties may mutually agree on the locale where the arbitration is to be held. Any disputes regarding the locale that are to be decided by the AAA must be submitted to the AAA and all other parties within 14 calendar days from the date of the AAA s initiation of the case or the date established by the AAA. Disputes regarding locale shall be determined in the following manner: (a) When the parties arbitration agreement is silent with respect to locale, and if the parties disagree as to the locale, the AAA may initially determine the place of 12 RULES AND MEDIATION PROCEDURES American Arbitration Association

13 arbitration, subject to the power of the arbitrator after appointment to make a final determination on the locale. (b) When the parties arbitration agreement requires a specific locale, absent the parties agreement to change it, or a determination by the arbitrator upon appointment that applicable law requires a different locale, the locale shall be that specified in the arbitration agreement. (c) If the reference to a locale in the arbitration agreement is ambiguous, and the parties are unable to agree to a specific locale, the AAA shall determine the locale, subject to the power of the arbitrator to finally determine the locale. The arbitrator, at the arbitrator s sole discretion, shall have the authority to conduct special hearings for document production purposes or otherwise at other locations if reasonably necessary and beneficial to the process. A-15. Number of Arbitrators (a) If the arbitration agreement does not specify the number of arbitrators, the dispute shall be heard and determined by one arbitrator, unless the AAA, in its discretion, directs that three arbitrators be appointed. A party may request three arbitrators in the Demand or Answer, which request the AAA will consider in exercising its discretion regarding the number of arbitrators appointed to the dispute. (b) Any request for a change in the number of arbitrators as a result of an increase or decrease in the amount of a claim or a new or different claim must be made to the AAA and other parties to the arbitration no later than seven calendar days after receipt of the A-9 required notice of change of claim amount. If the parties are unable to agree with respect to the request for a change in the number of arbitrators, the AAA shall make that determination. A-16. Appointment from National Panel If the parties have not appointed an arbitrator and have not provided any other method of appointment, the arbitrator shall be appointed in the following manner: (a) The AAA shall send simultaneously to each party to the dispute an identical list of 10 names of persons chosen from the National Panel or other AAA Panels. The parties are encouraged to agree to an arbitrator from the submitted list and to advise the AAA of their agreement. (b) If the parties are unable to agree upon an arbitrator, each party to the dispute shall have 14 calendar days from the transmittal date in which to strike names objected to, number the remaining names in order of preference, and return the list to the AAA. The parties are not required to exchange selection lists. If a party does not return the list within the time specified, all persons named therein shall Rules Amended and Effective February 1, ACCOUNTING RULES 13

14 be deemed acceptable to that party. From among the persons who have been approved on both lists, and in accordance with the designated order of mutual preference, the AAA shall invite the acceptance of an arbitrator to serve. If the parties fail to agree on any of the persons named, or if acceptable arbitrators are unable to act, or if for any other reason the appointment cannot be made from the submitted lists, the AAA shall have the power to make the appointment from among other members of the National Panel or other AAA Panels without the submission of additional lists. (c) Unless the parties agree otherwise, when there are two or more claimants or two or more respondents, the AAA may appoint all the arbitrators. A-17. Direct Appointment by a Party (a) If the agreement of the parties names an arbitrator or specifies a method of appointing an arbitrator, that designation or method shall be followed. The notice of appointment, with the name and address of the arbitrator, shall be filed with the AAA by the appointing party. Upon the request of any appointing party, the AAA shall submit a list of members of the National Panel or other AAA Panels from which the party may, if it so desires, make the appointment. (b) Where the parties have agreed that each party is to name one arbitrator, the arbitrators so named must meet the standards of A-21(a) with respect to impartiality and independence unless the parties have specifically agreed pursuant to A-21(b) that the party-appointed arbitrators are to be non-neutral and need not meet those standards. (c) If the agreement specifies a period of time within which an arbitrator shall be appointed and any party fails to make the appointment within that period, the AAA shall make the appointment. (d) If no period of time is specified in the agreement, the AAA shall notify the party to make the appointment. If within 14 calendar days after such notice has been sent, an arbitrator has not been appointed by a party, the AAA shall make the appointment. A-18. Appointment of Chairperson by Party-Appointed Arbitrators or Parties (a) If, pursuant to A-17, either the parties have directly appointed arbitrators, or the arbitrators have been appointed by the AAA, and the parties have authorized them to appoint a chairperson within a specified time and no appointment is made within that time or any agreed extension, the AAA may appoint the chairperson. (b) If no period of time is specified for appointment of the chairperson, and the party-appointed arbitrators or the parties do not make the appointment within 14 calendar days from the date of the appointment of the last party-appointed arbitrator, the AAA may appoint the chairperson. 14 RULES AND MEDIATION PROCEDURES American Arbitration Association

15 (c) If the parties have agreed that their party-appointed arbitrators shall appoint the chairperson from the National Panel or other AAA Panels, the AAA shall furnish to the party-appointed arbitrators, in the manner provided in A-16, a list selected from the National Panel or other AAA Panels, and the appointment of the chairperson shall be made as provided in that Section. A-19. Nationality of Arbitrator Where the parties are nationals of different countries, the AAA, at the request of any party or on its own initiative, may appoint as arbitrator a national of a country other than that of any of the parties. The request must be made before the time set for the appointment of the arbitrator as agreed by the parties or set by these rules. A-20. Disclosure (a) Any person appointed or to be appointed as an arbitrator, as well as the parties and their representatives, shall disclose to the AAA any circumstance likely to give rise to justifiable doubt as to the arbitrator s impartiality or independence, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or their representatives. Such obligation shall remain in effect throughout the arbitration. Failure on the part of a party or a representative to comply with the requirements of this rule may result in the waiver of the right to object to an arbitrator in accordance with A-48. (b) Upon receipt of such information from the arbitrator or another source, the AAA shall communicate the information to the parties and, if it deems it appropriate to do so, to the arbitrator and others. (c) Disclosure of information pursuant to this Section A-20 is not an indication that the arbitrator considers that the disclosed circumstance is likely to affect impartiality or independence. A-21. Disqualification of Arbitrator (a) Any arbitrator shall be impartial and independent and shall perform his or her duties with diligence and in good faith, and shall be subject to disqualification for: (i) partiality or lack of independence, (ii) inability or refusal to perform his or her duties with diligence and in good faith, and (iii) any grounds for disqualification provided by applicable law. (b) The parties may agree in writing, however, that arbitrators directly appointed by a party pursuant to Section A-17 shall be non-neutral, in which case such arbitrators need not be impartial or independent and shall not be subject to disqualification for partiality or lack of independence. Rules Amended and Effective February 1, ACCOUNTING RULES 15

16 (c) Upon objection of a party to the continued service of an arbitrator, or on its own initiative, the AAA shall determine whether the arbitrator should be disqualified under the grounds set out above, and shall inform the parties of its decision, which decision shall be conclusive. A-22. Notice of Arbitration Appointment Notice of the appointment of any arbitrator, whether appointed unilaterally by a party, mutually by the parties, or by the AAA, shall be sent to the arbitrator by the AAA, together with a copy of these rules, and the signed acceptance of the arbitrator shall be filed with the AAA prior to the opening of the first hearing. A-23. Communication with Arbitrator (a) No party and no one acting on behalf of any party shall communicate ex parte with an arbitrator or a candidate for arbitrator concerning the arbitration, except that a party, or someone acting on behalf of a party, may communicate ex parte with a candidate for direct appointment pursuant to A-17 in order to advise the candidate of the general nature of the controversy and of the anticipated proceedings and to discuss the candidate s qualifications, availability, or independence in relation to the parties or to discuss the suitability of candidates for selection as a third arbitrator where the parties or party-designated arbitrators are to participate in that selection. (b) Section A-23(a) does not apply to arbitrators directly appointed by the parties who, pursuant to Section A-21(b), the parties have agreed in writing are non-neutral. Where the parties have so agreed under A-21(b), the AAA shall as an administrative practice suggest to the parties that they further agree that Section A-23(a) should nonetheless apply prospectively. (c) In the course of administering an arbitration, the AAA may initiate communications with each party or anyone acting on behalf of the parties either jointly or individually. (d) As set forth in A-50(c), unless otherwise instructed by the AAA or by the arbitrator, any documents submitted by any party or to the arbitrator shall simultaneously be provided to the other party or parties to the arbitration. A-24. Vacancies (a) If for any reason an arbitrator is unable or unwilling to perform the duties of the office, the AAA may, on proof satisfactory to it, declare the office vacant. Vacancies shall be filled in accordance with the applicable provisions of these rules. (b) In the event of a vacancy in a panel of neutral arbitrators after the hearings have commenced, the remaining arbitrator or arbitrators may continue with the hearing and determination of the controversy, unless the parties agree otherwise. 16 RULES AND MEDIATION PROCEDURES American Arbitration Association

17 (c) In the event of the appointment of a substitute arbitrator, the panel of arbitrators shall determine in its sole discretion whether it is necessary to repeat all or part of any prior hearings. A-25. Preliminary Hearing As promptly as practical after the selection of the arbitrator, a preliminary hearing shall be scheduled. The parties should be invited to attend the preliminary hearing along with their representatives. The preliminary hearing may be conducted in person or by telephone. At the preliminary hearing, the parties should be prepared to discuss and establish a procedure for the conduct of the arbitration that is appropriate to achieve a fair, efficient, and economical resolution of the dispute and that safeguards each party s opportunity to fairly present its claims and defenses. Sections P-1 and P-2 and D-1 through D-11 of these rules address the issues to be considered at the preliminary hearing. A-26. Disclosure and Production of Information All exchanges of information prior to the hearing shall be carried out pursuant to D-1 through D-11 herein. A-27. Enforcement Powers of the Arbitrator The arbitrator shall have the authority to issue any orders necessary to enforce the provisions of A-26 and sections P-1and P-2 and D-1 through D-11 and to otherwise achieve a fair, efficient, and economical resolution of the case, including, without limitation: (a) conditioning any exchange or production of confidential documents and information, and the admission of confidential evidence at the hearing, on appropriate orders to preserve such confidentiality; (b) imposing reasonable search parameters for electronic and other documents if the parties are unable to agree; (c) allocating costs of producing documentation, including electronically stored documentation; (d) in the case of willful non-compliance with any order issued by the arbitrator, drawing adverse inferences, excluding evidence and other submissions, and/or making special allocations of costs or an interim award of costs arising from such non-compliance; and (e) issuing any other enforcement orders that the arbitrator is empowered to issue under applicable law. Rules Amended and Effective February 1, ACCOUNTING RULES 17

18 A-28. Dispositive Motions The arbitrator may allow the filing of and make rulings upon a dispositive motion only if the arbitrator determines that the moving party has shown that the motion is likely to succeed and dispose of or narrow the issues in the case. A-29. Date, Time, and Place of Hearing The arbitrator shall set the date, time, and place of each hearing, including the preliminary hearing. The parties shall respond to requests for hearing dates in a timely manner, be cooperative in scheduling the earliest practicable date, and adhere to the established hearing schedule. The AAA shall send a notice of hearing to the parties at least 10 calendar days in advance of the hearing date, unless otherwise agreed by the parties. A-30. Attendance at Hearings The arbitrator and the AAA shall maintain the privacy of the hearings unless the law provides to the contrary. Any person having a direct interest in the arbitration is entitled to attend hearings. The arbitrator shall otherwise have the power to require the exclusion of any witness, other than a party or other essential person, during the testimony of any other witness. It shall be discretionary with the arbitrator to determine the propriety of the attendance of any other person. A-31. Representation Any party may participate without representation (pro se) or by counsel or any other representative of the party s choosing, unless such choice is prohibited by applicable law. A party intending to be so represented shall notify the other party and the AAA of the name, telephone number and address, and address if available, of the representative at least seven calendar days prior to the date set for the hearing at which that person is first to appear. When such a representative initiates an arbitration or responds for a party, notice is deemed to have been given. A-32. Stenographic Record (a) Any party desiring a stenographic record shall make arrangements directly with a stenographer and shall notify the other parties of these arrangements at least three calendar days in advance of the hearing. The requesting party or parties shall pay the cost of the record. 18 RULES AND MEDIATION PROCEDURES American Arbitration Association

19 (b) No other means of recording the proceedings will be permitted absent the agreement of the parties or per the direction of the arbitrator. (c) If the transcript or any other recording is agreed by the parties or determined by the arbitrator to be the official record of the proceeding, it must be provided to the arbitrator and made available to the other parties for inspection, at a date, time, and place determined by the arbitrator. (d) The arbitrator may resolve any disputes with regard to apportionment of the costs of the stenographic record or other recording. A-33. Postponements The arbitrator may postpone any hearing upon agreement of the parties, upon request of a party for good cause shown, or upon the arbitrator s own initiative. A-34. Oaths Before proceeding with the first hearing, each arbitrator may take an oath of office and, if required by law, shall do so. The arbitrator may require witnesses to testify under an oath administered by any duly qualified person and if it is required by law or requested by any party, shall do so. A-35. Conduct of Proceedings (a) The claimant shall present evidence to support its claim. The respondent shall then present evidence to support its defense. Witnesses for each party shall also submit to questions from the arbitrator and the adverse party. The arbitrator has the discretion to vary this procedure, provided that the parties are treated with equality and that each party has the right to be heard and is given a fair opportunity to present its case. (b) The arbitrator, exercising his or her discretion, shall conduct the proceedings with a view to expediting the resolution of the dispute and may direct the order of proof, bifurcate proceedings, and direct the parties to focus their presentations on issues the decision of which could dispose of all or part of the case. (c) The parties may offer evidence that is relevant and material to the dispute and shall produce evidence that the arbitrator may deem necessary to an understanding and determination of the dispute. An arbitrator or other person authorized by law to subpoena witnesses or documents may do so upon the request of any party or independently. (d) The arbitrator shall determine the admissibility, relevance, materiality, credibility, and weight of the evidence offered, and conformity to legal rules of evidence shall not be necessary. The arbitrator may request offers of proof and may reject evidence deemed by the arbitrator to be cumulative, irrelevant, unreliable, unnecessary, or of slight value compared to the time and expense involved. All Rules Amended and Effective February 1, ACCOUNTING RULES 19

20 evidence shall be taken in the presence of all of the arbitrators and all of the parties, except where any of the parties is absent, in default, or has waived the right to be present. (e) The arbitrator(s) may receive and consider the evidence of witnesses by affidavit or deposition testimony, giving it such weight as the arbitrator deems it entitled to after consideration of any objection made to its admission. (f) The arbitrator shall take into account applicable principles of legal privilege, such as those involving the confidentiality of communications between a lawyer and client. (g) When deemed appropriate, the arbitrator may also allow for the presentation of evidence by alternative means, including video conferencing, internet communication, telephonic conferences, and means other than an in-person presentation. Such alternative means must afford a full opportunity for all parties to present any evidence that the arbitrator deems material and relevant to the resolution of the dispute and, when involving witnesses, provide an opportunity for cross-examination. (h) At a date agreed upon by the parties or ordered by the arbitrator, the parties shall give written notice for any witness or expert witness who has provided a written witness statement to appear in person at the arbitration hearing for examination. If such notice is given, and the witness fails to appear, the arbitrator may disregard the written witness statement and/or expert report of the witness or make such other order as the arbitrator may consider just and reasonable. (i) If a witness whose testimony is represented by a party to be essential is unable or unwilling to testify at the hearing, either in person or through electronic or other means, either party may request that the arbitrator order the witness to appear in person for examination before the arbitrator at a time and location where the witness is willing and able to appear voluntarily or can legally be compelled to do so. Any such order may be conditioned upon payment by the requesting party of all reasonable costs associated with such examination. (j) The parties may agree to waive oral hearings in any case and may also agree to utilize the Procedures for Resolution of Disputes through Document Submission, found in E-6. A-36. Inspection or Investigation An arbitrator finding it necessary to make an inspection or investigation in connection with the arbitration shall direct the AAA to so advise the parties. The arbitrator shall set the date and time, and the AAA shall notify the parties. Any party who so desires may be present at such an inspection or investigation. In the event that one or all parties are not present at the inspection or investigation, the arbitrator shall make a verbal or written report to the parties and afford them an opportunity to comment. 20 RULES AND MEDIATION PROCEDURES American Arbitration Association

21 A-37. Majority Decision (a) When the panel consists of more than one arbitrator, unless required by law or by the arbitration agreement or section (b) of this rule, a majority of the arbitrators must make all decisions. (b) Where there is a panel of three arbitrators, absent an objection of a party or another member of the panel, the chairperson of the panel is authorized to resolve any disputes related to the exchange of information or procedural matters without the need to consult the full panel. A-38. Arbitration in the Absence of a Party or Representative Unless the law provides to the contrary, the arbitration may proceed in the absence of any party or representative who, after due notice, fails to be present or fails to obtain a postponement. An award shall not be made solely on the default of a party. The arbitrator shall determine that proper notice of the hearing was given to the defaulting party. The arbitrator shall require the party who is present to submit evidence that the arbitrator requires for the making of an award. A-39. Post-Hearing Filing of Documents or Other Evidence If the parties agree or the arbitrator directs that documents or other evidence be submitted to the arbitrator after the hearing, the documents or other evidence shall be filed with the AAA for transmission to the arbitrator. All parties shall be afforded an opportunity to examine such documents or other evidence. A-40. Closing of Hearing (a) The arbitrator shall specifically inquire of all parties whether they have any further proofs to offer or witnesses to be heard. Upon receiving negative replies or if satisfied that the record is complete, the arbitrator shall declare the hearing closed. (b) If documents or responses are to be filed as provided in A-39, or if briefs are to be filed, the hearing shall be declared closed as of the final date set by the arbitrator for the receipt of briefs. If no documents, responses, or briefs are to be filed, the arbitrator shall declare the hearings closed as of the date of the last hearing (including telephonic hearings). If the case was heard without any oral hearings, the arbitrator shall close the hearings upon the due date established for receipt of the final submission. (c) The time limit within which the arbitrator is required to make the award shall commence, in the absence of other agreements by the parties, upon the closing of the hearing. The AAA may extend the time limit for rendering of the award only in unusual and extreme circumstances. Rules Amended and Effective February 1, ACCOUNTING RULES 21

22 A-41. Reopening of Hearing The hearing may be reopened on the arbitrator s initiative, or by the direction of the arbitrator upon application of a party, at any time before the award is made. If reopening the hearing would prevent the making of the award within the specific time agreed to by the parties in the arbitration agreement, the matter may not be reopened unless the parties agree to an extension of time. When no specific date is fixed by agreement of the parties, the arbitrator shall have 30 calendar days from the closing of the reopened hearing within which to make an award (14 calendar days if the case is governed by the Expedited Procedures). A-42. Time of Award The award shall be made promptly by the arbitrator and, unless otherwise agreed by the parties or specified by law, no later than 30 days from the date of closing the hearing, or if oral hearings have been waived, from the date of the AAA s transmittal of the final statements and proofs to the arbitrator. A-43. Form of Award The award shall be in writing and shall be signed by a majority of the arbitrators. The award shall be executed in the manner required by law. The arbitrator need not render a reasoned award unless the parties request such an award in writing prior to appointment of the arbitrator or unless the arbitrator determines that a reasoned award is appropriate. A-44. Scope of Award (a) The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the agreement of the parties, including, but not limited to, specific performance of a contract; except that the arbitrator may not compel an accounting firm to either complete a professional engagement or to issue a specified form of opinion or report. (b) In addition to a final award, the arbitrator may make other decisions, including interim, interlocutory, or partial rulings, orders, and awards. In any interim, interlocutory, or partial award, the arbitrator may assess and apportion the fees, expenses, and compensation related to such award as the arbitrator determines is appropriate. (c) In the final award, the arbitrator shall assess the fees, expenses, and compensation provided in Sections A-55, A-56, and A-57. The arbitrator may apportion such fees, expenses, and compensation among the parties in such amounts as the arbitrator determines is appropriate. 22 RULES AND MEDIATION PROCEDURES American Arbitration Association

23 (d) The award of the arbitrator(s) may include: (i) interest at such rate and from such date as the arbitrator(s) may deem appropriate; and (ii) an award of attorneys fees if all parties have requested such an award or it is authorized by law or their arbitration agreement. A-45. Award Upon Settlement Consent Award (a) If the parties settle their dispute during the course of the arbitration and if the parties so request, the arbitrator may set forth the terms of the settlement in a consent award. A consent award must include an allocation of arbitration costs, including administrative fees and expenses as well as arbitrator fees and expenses. (b) The consent award shall not be released to the parties until all administrative fees and all arbitrator compensation have been paid in full. A-46. Delivery of Award to Parties Parties shall accept as notice and delivery of the award the placing of the award or a true copy thereof in the mail addressed to the parties or their representatives at their last known addresses, personal or electronic service of the award, or the filing of the award in any other manner that is permitted by law. A-47. Modification of Award Within 20 calendar days after the transmittal of an award, any party, upon notice to the other parties, may request the arbitrator, through the AAA, to correct any clerical, typographical, or computational errors in the award. The arbitrator is not empowered to redetermine the merits of any claim already decided. The other parties shall be given 10 calendar days to respond to the request. The arbitrator shall dispose of the request within 20 calendar days after transmittal by the AAA to the arbitrator of the request and any response thereto. A-48. Waiver of Rules Any party who proceeds with the arbitration after knowledge that any provision or requirement of these rules has not been complied with and who fails to state an objection in writing shall be deemed to have waived the right to object. Rules Amended and Effective February 1, ACCOUNTING RULES 23

24 A-49. Extensions of Time The parties may modify any period of time by mutual agreement. The AAA or the arbitrator may for good cause extend any period of time established by these rules, except the time for making the award. The AAA shall notify the parties of any extension. A-50. Serving of Notice and Communications (a) Any papers, notices, or process necessary or proper for the initiation or continuation of an arbitration under these rules, for any court action in connection therewith, or for the entry of judgment on any award made under these rules, may be served on a party by mail addressed to the party or its representative at the last known address or by personal service, in or outside the state where the arbitration is to be held, provided that reasonable opportunity to be heard with regard to the dispute is or has been granted to the party. (b) The AAA, the arbitrator, and the parties may also use overnight delivery, fax, or to give the notices required by these rules. Where all parties and the arbitrator agree, notices may be transmitted by or other methods of communication. (c) Unless otherwise instructed by the AAA or by the arbitrator, any documents submitted by any party to the AAA or to the arbitrator shall simultaneously be provided to the other party or parties to the arbitration. (d) Unless otherwise instructed by the AAA or by the arbitrator, all written communications made by any party to the AAA or to the arbitrator shall simultaneously be provided to the other party or parties to the arbitration. (e) Failure to provide the other party with copies of communications made to the AAA or to the arbitrator may prevent the AAA or the arbitrator from acting on any requests or objections contained therein. (f) The AAA may direct that any oral or written communications that are sent by a party or their representative shall be sent in a particular manner. The failure of a party or its representative to do so may result in the AAA s refusal to consider the issue raised in the communication. A-51. Release of Documents for Judicial Proceedings The AAA shall, upon the written request of a party to the arbitration, furnish to the party, at its expense, copies or certified copies of any papers in the AAA s possession that are not determined by the AAA to be privileged or confidential. 24 RULES AND MEDIATION PROCEDURES American Arbitration Association